NewMarket Corporation (NEU)

Quick ratio

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Cash	US$ in thousands	111,936	68,712	83,304	125,172	144,397
Short-term investments	US$ in thousands	-371,493	0	375,918	0	—
Receivables	US$ in thousands	432,349	453,692	391,779	336,395	335,826
Total current liabilities	US$ in thousands	364,164	423,887	725,087	312,455	308,895
Quick ratio		0.47	1.23	1.17	1.48	1.55

December 31, 2023 calculation

Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($111,936K + $-371,493K + $432,349K) ÷ $364,164K
= 0.47

The quick ratio of NewMarket Corp. has fluctuated over the past five years, ranging from a low of 1.23 in 2021 to a high of 1.66 in 2019. The quick ratio measures the company's ability to meet short-term financial obligations using its most liquid assets. A quick ratio above 1 indicates that the company has enough liquid assets to cover its current liabilities.

In 2023, the quick ratio improved significantly to 1.60 compared to the previous year, indicating a stronger liquidity position. This suggests that NewMarket Corp. had more than enough liquid assets to cover its short-term obligations at the end of 2023.

However, it is important to note that the quick ratio was considerably lower in 2021 at 1.23, which may have raised concerns about the company's ability to meet its short-term obligations using its liquid assets effectively.

Overall, analyzing the trend in the quick ratio over the past five years provides insights into NewMarket Corp.'s liquidity management and its ability to navigate short-term financial challenges.